Uptick Rule Legislation Goes To SEC

It looks
like Capitol Hill lawmakers aren't going to wait for the
Securities and Exchange Commission to go through the usual
rule-making process to restore the uptick rule, which supposedly
curbs "abusive" short selling. They are introducing legislation
to force the issue ASAP.

Sen. Ted Kaufman, D-Del., in his first bill proposal since being
sworn in to Congress in mid-January, submitted to the
Securities and Exchange Commission on Monday
a bipartisan legislation that aims to
reinstate the so-called “uptick rule” that prohibited short sales
from the Depression era until its repeal in mid-2007. “Abusive
short selling is tantamount to fraud and market manipulation and
must be stopped – now,” Kaufman said on the Senate floor late
Monday. “The uptick rule should have never been repealed. To
permit people to sell shares they don’t have and won’t be able to
deliver turns investment into pure speculation. The time has come
for this practice to stop.”

He was joined in the effort by Sen. Johnny Isakson, R-Ga.,
who announced Tuesday his co-sponsorship of the bill and
who said he has since last fall been calling for reinstatement of
the rule.

“Senator Kaufman has introduced a piece of legislation that is
right for America, it is right for America’s investors, and it is
right for our stock market as it still languishes today somewhere
down near what we hope is the bottom,” Isakson said during a
speech on the Senate floor. “One way to ensure that bottom exists
is to stop rewarding those who would feed off of it and instead
reinstate good discipline that ensures good practices and allows
the market to restore itself back to a good equilibrium.”